HORROR: The masked jihadi with a man thought to be Steven Sotloff in a still from the IS video [SG]

Steven Sotloff, 31, has been held captive since 2013 and was tonight allegedly executed by the same man who beheaded fellow US journalist, James Foley.

Just two weeks after the first slaughter the terrorist spoke out to say: "I'm back, Obama, and I'm back because of your arrogant foreign policy towards the Islamic State."

The video entitled "A Second Message to America" shows the masked figure holding a knife alongside Sotloff – who is wearing an orange jumpsuit.

He then threatens to kill a Briton held hostage by the group, next.

FEAR: What is thought to be a still from the second beheading video showing Steven Sotloff [AP]

“We have already been working hard to keep British people safe and we will continue to do all we can to protect our country”

David Cameron

David Cameron has spoken about the alleged murder and said: “If verified, this is a despicable and barbaric murder. My thoughts and prayers are with Mr Sotloff’s family and friends tonight as they deal with this appalling and tragic situation.

“As I have said consistently over the last few weeks, ISIL terrorists speak for no religion. They threaten Syrians, Iraqis, Americans and British people alike and make no distinction between Muslims, Christians or any other faith.

“We have already been working hard to keep British people safe and we will continue to do all we can to protect our country and our people from these barbaric terrorists. Tomorrow morning I will chair a COBR meeting to review these latest developments.”

Mr Sotloff reads out a message directed towards President Barack Obama and states his full name.

He said: "I am paying the price of your interference with my life.

"You've spent billions of pounds US taxpayers' dollars and we have lost thousands of our troops in our previous fighting against the Islamic State, so where is the people's interest in reigniting this war?"

The British executioner points his knife at the camera and says: "We take this opportunity to warn those governments that enter this evil alliance of America against the Islamic State to back off and leave our people alone."

Wearing the same black get-up he wore to execute Mr Foley "Jihadi John" carries a pistol under his arm while the black flag of IS flutters in the background.

TRAGIC: It has not been confirmed whether Steven Sotloff has been killed [REUTERS]

A Foreign & Commonwealth Office (FCO) spokesperson added: "We are aware of a video which purports to be the murder of a US national and includes a threat to another hostage.

"We are urgently working to verify the authenticity of the video."

Barak Barfi, a spokesman for the Sotloff family confirmed the death.

"The family knows of this horrific tragedy and is grieving privately. There will be no public comment from the family during this difficult time," Barfi said.

White House spokesman Josh Earnest said US officials were checking the reports.

"I'm not in a position to confirm the authenticity of that video or the reports," he said.

"If there is a video that's been released, it's something that will be analysed very carefully by the US government and our intelligence officials to establish its authenticity."

HELL: Steven Sotloff's mother directly addressed his captors [AP]

After Mr Foley's death Mr Sotloff's mother appealed to IS leader Abu Bakr al-Baghdadi to save her son's life.

Mr Cameron has warned that the West faces a "generational" struggle against the extremist ideology of IS, suggesting it is a more potent force than al Qaida.

Yesterday he announced a package of measures to combat the danger from British jihadists returning from fighting in Syria and Iraq to carry out attacks here.

Cameron said police would be given powers to confiscate passports at airports, and suggested that suspected extremists could be barred from re-entering the country even if they are UK nationals.

Mr Sotloff grew up in Miami, Florida, and graduated from university in Meriden, New Hampshire.

He worked for Time and Foreign Policy magazine and appeared on US TV channels CNN and Fox news.

A self-described "stand-up philosopher" he disappeared while reporting near Aleppo after crossing the Syrian border from Turkey in August 2013.

His family kept the news of his disappearance secret, fearing he would be harmed if his capture was made public.